Create Grant Debit Memos

You should not create Debit Memos for Grants from the Accounts Payable module. You should use Grant Adjustments in the Grantee and Grant Management module to create Debit Memos.

There are three types of adjustments that can create Debit Memos:

• Cancellation: Creates a Debit Memo with a positive Line Item that will reduce or zero out the Grants Payable.

• Amount Adjustment: Either creates a Debit Memo with a positive Line Item to reduce the Grant amount or a Debit Memo with a negative Line Item to increase the payable amount.

• Single Fund Correction or Multiple Fund Correction: Creates a positive Line Item to reduce the contribution amount from the Fund(s) and a negative Line Item to add the amount to the Fund that is taking on the obligation for payment.

When the Debit Memo is posted it will adjust the Open Item and create corrective GL Journal entries.

Note: Refer to Adjusting Historic Grant Applications in the Grantee and Grant Management module for more information on adjustments.

Note: If you need to adjust a Grant that has already been paid, you must first void the check in order to make the adjustment.

Refer to Voiding Payments for more information.

When you void the check FIMS will ask if you want to create a Debit Memo. You should generally say no and create the Debit Memo during the Grant Adjustment process. It is best to say no, but if you permit the Void to create the Debit Memo, do not create it during the Grant Adjustment.

Debit Memo Tips

Debit Memo line items are normally positive. FIMS knows the item is a Debit Memo and will reduce the payable by the selected amount. If you need to increase a payable, you must enter a negative line item.

Note: Debit Memos that are created by Grant Adjustments in the Grantee and Grant Management module to increase the Grant amount will be negative.

• If you want to shift a payable to a different Fund, enter a positive Line Item for the incorrect Fund and a negative Line Item for the correct Fund.

• If you want to correct a G/L expense account for an Open Item, enter a positive Line Item with the incorrect account and a negative Line Item with the correct account. Then you can create a Debit Memo to complete the correction. For example, if a Voucher is debited to the wrong expense account, do the following:

1. Create a Debit Memo in Open Items against the payable and leave the first line item (with the incorrect expense account) untouched.

2. Add a second Line Item and enter the same amount as a negative amount.

3. Enter the correct expense account for the negative Line Item.

Debit Memos and Voided Payments

FIMS allows you to edit Debit Memo Line Items that are created when you void payments. This may be useful if, for example, you want to shift an administrative payment from one Fund to another after the payment is made. Once you post the corrective Debit Memo, you can enter a prepaid administrative Voucher using the original check number.

Note: If you want to change the Fund after a Grant payment is made, use the Paid Funds Correction utility. Refer to Correcting Funds in the Grantee and Grant Management module for more information.

Debit Memos and Grant Cancellations

When you cancel Grants, the resulting Debit Memo will debit the Grants Payable account and credit the Grants Expense account by default.

• If the Grant was expensed in a previous year, some organizations prefer to credit a Returned Grants revenue account, so that Grant expenses for at least the current year will tie out with the Grant Amount detail.

• Some organizations always credit a Returned Grants account, so that Grant expenses will only tie out only with Grants Voted (which adjustments do not change).

If you use one of these methods, the credit account must be changed on the Line-Item tab before you post the Debit Memo. Refer to Canceling Grants in the Grantee and Grant Management module for more information.

Unapplied Debit Memos

You can use unapplied Debit Memos to record a credit on a Vendor account, which you can apply to a future payable to the Vendor.

If you want to create an unapplied Debit Memo, simply leave the Apply To field blank when you create the Debit Memo.

Note: When you run the Edit report for unapplied Debit Memos, you will receive a warning that the debit memo is unapplied.

Once you post a suitable payable from the same Vendor, you must run the Apply Debit Memos utility to link the Debit Memo to the Open Item. Refer to Applying Debit Memos to Open Items for more information.